Help a rural entrepreneur by investing in their business

I am always intrigued by the way a bank helps people live their dream lives. Whether your dream is to drive that best car in the market, buy your own home or get an education from that top notch school, there is a loan available to live that dream in the present. By helping people have, what they would otherwise had taken a life time to get, a bank as an institution has a big role in enriching people’s lives.

So all you need to do is approach a bank for what you want and get the loan. Right? Well, not so fast! If you are one of those people who do not have a good credit history, then the loan may not be sanctioned. Alternatively if the interest rates are too high to pay for you, it may not be an attractive option to you either. One may think that this is a sure sensible way to go. After all, banks exist to make a profit of their own too.

However, it is such a sad fact that there are a large number of people who are never able to get the loan they need, as they invariably fall into the above two categories. These are the people who are stuck up in what economics defines as the ‘cycle of poverty’. Because of being poor, they are not able to access financial capital to start-up a business or learn a new skill and due to this they again continue to stay poor.

All around, you see different people of this section in the society, serving you every day, in the guise of fruit and vegetable vendors, milk sellers etc conveniently located close to your home. All they need is a little nudge to help improve the productivity of their work and hence their income. And by doing that, they are also able to serve the local public in a better way. As everybody else, isn’t it their right too, to improve their standards of living? 

It is correct that a bank should check the credit history to avoid defaults before giving a loan and should charge an interest to get their return on investment. But how can a poor person have a credit history when no one has trusted him/her with credit before? Also the amount of loan required by them is very low. If a very high interest rate is charged on a small income, then would the loan be a viable one?  

To help empower this section of the society,  “Microcredit Banks” have been set-up by various voluntary organizations. Professor Muhammad Yunus is one of the pioneers of setting up such a bank, where small loans are given to poor people, with a low interest rate, so that they can find income generating opportunities, enabling them to rise above poverty levels. Yunus was awarded a noble peace prize for his outstanding efforts in making millions of people financially self sufficient.

Today, there are many micro credit institutions all over the world. One of these institutions is the charity “Rangde”. This is a web based social initiative which supports rural entrepreneurs from low income households by providing access to low cost microcredit. With more than 14000 borrowers and close to 4000 investors and a repayment rate of more than 99%, the charity is doing a commendable work in this sector. This month I would like help a rural entrepreneur by investing in their business through rangde to express my support in their zeal to grow in life.

Link to the charity website
www.rangde.org

Link to the list of borrowers to invest online

http://www.rangde.org/invest/microcredit/india